Spring-Clean Your Finances in 5 Easy Steps
Have bills been piling up on your desk? Is your wallet bulging at the seams? If you’re in the spring cleaning mode, don’t forget your finances could probably use one too!
Spring is finally upon us and it’s time for some spring cleaning! While you may think your home is in dire need of a cleaning, maybe your finances are too! So take a break from cleaning your closet and start tidying up your wallet to have a fresher, clean mindset on your finances!
1. Declutter Your Finances
Like your home, to spring-clean your finances, it may be a good idea to start by organizing. You may want to gather all your important financial documents that you have lying around the house. This means all those leftover receipts, bank statements, and bills. Find a way to organize that works for you. Whether it be a file cabinet or online, neatly organizing your financial documents will make it easier for you to track your expenses, maintain your budget, stay current on your payments, and make next year’s tax season less of a headache. Not to mention a cleaner desk!
This may be a good time to see if your financial accounts offer digital statements and documentation. Opting to receive your paperwork from your institutions electronically can help you cut down on the clutter and make next year’s spring cleaning go even faster!
2. Bring in the Trash Can or Shredder
Now that your financial documents are well organized, you should consider getting rid of any unnecessary items. Any old bills, receipts, reconciled bank statements, and old correspondences with financial institutions should be shredded or discarded in a proper manner. And remember, many of these documents may have social security or bank account numbers making it very important that these are not just thrown out, but shredded! This can help prevent identity theft.
3. Shine and Polish Your Debt
Take a look at your outstanding debts to get a better understanding of your current situation. Are you current with your payments? Are you contributing more than the minimum? Are there any debts you’ve been neglecting?
If you find you’re struggling with debt and it’s starting to pile up, your monthly expenses may be too high. Consider taking a look at your budget, as it may need some retooling. Look back at your past expenses to see where you’re overspending. Budget adjustments, even little ones, can free up cash flow and help you find extra money to begin paying down your debt.
4. Double Check for Dust in the Corners
Sometimes, when spring-cleaning your home, you may miss a spot or two – this can be the same when it comes to spring-cleaning your finances. It’s very easy to miss certain expenses when you forget to budget for them. Though you didn’t mean to, these missed expenses can be killers and can cause you to overspend. Once your budget plan is created, double check that you aren’t missing anything and try to make sure you’re not just guesstimating your expenses. You may want to consider adding a line in your budget for “contingency” to cover these little expenses. This way when they arise, you’ll be ready.
5. Mop, Treat, and Repeat
Now that you have spring-cleaned your wallet, it is time to make sure your finances stay clean and protected. You may use Pine-Sol to mop and treat your floors, but when protecting your finances, you should consider setting up an Emergency Fund or simply opening a savings account. You should always make sure you are prepared for unexpected expenses. An Emergency Fund should have 6-9 months’ worth of expenses in it. If you have an emergency fund already, then maybe it’s time to increase your retirement savings. Even contributing 5% each month to your account will add up in the long-run.
A proper financial spring-cleaning may be just what you need to get your finances and debt in order. Once your finances are under control, you can relax with a clean mind-set on your debt. Have you spring-cleaned your finances? How did it go? Please feel free to leave your comments below!